There is a forum discussion from a few months ago ... here. I found it a little caotic to actually use to make plans.
High Level
H.R.5376 - Inflation Reduction Act of 2022 provides for 2 (Home improvement) financial incentives for consumers. Rebates (up to a total of $14k available thru 9/2031), and tax credits (up to $3,200 annually from 2023 to 2032).
The full text of the law is here
Rebates
- Will be administered by the states and are not expected to be available until late 2023
- Are expected to be point of sale discounts
- You need to qualify by income. As an example, a MFJ couple making $125,000 qualifies for 50% discounts in my zip code.
- Each state can make its own income rules. AGI or Gross Income are 2 options. A number of "hints" point to AGI, but we cannot know until our state is ready (they make a proposal to the Feds for a grant for the money)
- A calculator is available here to determine if you qualify based on income. Qualifying for the 50% rebate can still get you the full $14k discount, you would just have to have $28k of upgrades over 9 or so years. The remaining $14k out of pocket can still be eligible for tax credits.
- These are often referred to as High-Efficiency Electric Home Rebate (HEEHR) program
- $8000 for an electric heat pump HVAC system
- $4000 for an electric panel upgrade
- $2600 for electric wiring
- $1750 for an electric heat pump water heater
- $1600 for insulation
- $840 for an electric stove
- $840 for an electric heat pump clothes dryer
Code: Select all
(1) Funds to state energy offices and indian tribes.--In
addition to amounts otherwise available, there is appropriated
to the Secretary for fiscal year 2022, out of any money in the
Treasury not otherwise appropriated, to carry out a program--
(A) to award grants to State energy offices to
develop and implement a high-efficiency electric home
rebate program in accordance with subsection (c),
$4,275,000,000, to remain available through September
30, 2031; and
(B) to award grants to Indian Tribes to develop and
implement a high-efficiency electric home rebate program
in accordance with subsection (c), $225,000,000, to
remain available through September 30, 2031.
(2) Allocation of funds.--
(A) State energy offices.--The Secretary shall
reserve funds made available under paragraph (1)(A) for
each State energy office--
(i) <> in accordance
with the allocation formula for the State Energy
Program in effect on January 1, 2022; and
(ii) to be distributed to a State energy
office if the application of the State energy
office under subsection (b) is approved.
(B) Indian tribes.--The Secretary shall reserve
funds made available under paragraph (1)(B)--
(i) in a manner determined appropriate by the
Secretary; and
(ii) to be distributed to an Indian Tribe if
the application of the Indian Tribe under
subsection (b) is approved.
(C) <> Additional funds.--Not
earlier than 2 years after the date of enactment of this
Act, any money reserved under--
(i) subparagraph (A) but not distributed under
clause (ii) of that subparagraph shall be
redistributed to the State energy offices
operating a high-efficiency electric home rebate
program in proportion to the amount distributed to
those State energy offices under that clause; and
(ii) subparagraph (B) but not distributed
under clause (ii) of that subparagraph shall be
redistributed to the Indian Tribes operating a
high-efficiency electric home rebate program in
proportion to the amount distributed to those
Indian Tribes under that clause.
(3) Administrative expenses.--Of the funds made available
under paragraph (1), the Secretary shall use not more than 3
percent for--
(A) administrative purposes; and
(B) providing technical assistance relating to
activities carried out under this section.
(b) <> Application.--A State energy office or Indian
Tribe seeking a grant under the program shall submit to the Secretary an
application that includes a plan to implement a high-efficiency electric
home rebate program, including--
(1) <> a plan to verify the income
eligibility of eligible entities seeking a rebate for a
qualified electrification project;
[[Page 136 STAT. 2038]]
(2) a plan to allow rebates for qualified electrification
projects at the point of sale in a manner that ensures that the
income eligibility of an eligible entity seeking a rebate may be
verified at the point of sale;
(3) a plan to ensure that an eligible entity does not
receive a rebate for the same qualified electrification project
through both a high-efficiency electric home rebate program and
any other Federal grant or rebate program, pursuant to
subsection (c)(8); and
(4) any additional information that the Secretary may
require.
(c) High-efficiency Electric Home Rebate Program.--
(1) <> In general.--Under the program, the
Secretary shall award grants to State energy offices and Indian
Tribes to establish a high-efficiency electric home rebate
program under which rebates shall be provided to eligible
entities for qualified electrification projects.
(2) Guidelines.--The Secretary shall prescribe guidelines
for high-efficiency electric home rebate programs, including
guidelines for providing point of sale rebates in a manner
consistent with the income eligibility requirements under this
section.
(3) Amount of rebate.--
(A) Appliance upgrades.--The amount of a rebate
provided under a high-efficiency electric home rebate
program for the purchase of an appliance under a
qualified electrification project shall be--
(i) not more than $1,750 for a heat pump water
heater;
(ii) not more than $8,000 for a heat pump for
space heating or cooling; and
(iii) not more than $840 for--
(I) an electric stove, cooktop,
range, or oven; or
(II) an electric heat pump clothes
dryer.
(B) Nonappliance upgrades.--The amount of a rebate
provided under a high-efficiency electric home rebate
program for the purchase of a nonappliance upgrade under
a qualified electrification project shall be--
(i) not more than $4,000 for an electric load
service center upgrade;
(ii) not more than $1,600 for insulation, air
sealing, and ventilation; and
(iii) not more than $2,500 for electric
wiring.
(C) Maximum rebate.--An eligible entity receiving
multiple rebates under this section may receive not more
than a total of $14,000 in rebates.
(4) Limitations.--A rebate provided using funding under this
section shall not exceed--
(A) in the case of an eligible entity described in
subsection (d)(1)(A)--
(i) 50 percent of the cost of the qualified
electrification project for a household the annual
income of which is not less than 80 percent and
not greater than 150 percent of the area median
income; and
(ii) 100 percent of the cost of the qualified
electrification project for a household the annual
income
[[Page 136 STAT. 2039]]
of which is less than 80 percent of the area
median income;
(B) in the case of an eligible entity described in
subsection (d)(1)(B)--
(i) 50 percent of the cost of the qualified
electrification project for a multifamily building
not less than 50 percent of the residents of which
are households the annual income of which is not
less than 80 percent and not greater than 150
percent of the area median income; and
(ii) 100 percent of the cost of the qualified
electrification project for a multifamily building
not less than 50 percent of the residents of which
are households the annual income of which is less
than 80 percent of the area median income; or
(C) in the case of an eligible entity described in
subsection (d)(1)(C)--
(i) 50 percent of the cost of the qualified
electrification project for a household--
(I) on behalf of which the eligible
entity is working; and
(II) the annual income of which is
not less than 80 percent and not greater
than 150 percent of the area median
income; and
(ii) 100 percent of the cost of the qualified
electrification project for a household--
(I) on behalf of which the eligible
entity is working; and
(II) the annual income of which is
less than 80 percent of the area median
income.
(5) Amount for installation of upgrades.--
(A) In general.--In the case of an eligible entity
described in subsection (d)(1)(C) that receives a rebate
under the program and performs the installation of the
applicable qualified electrification project, a State
energy office or Indian Tribe shall provide to that
eligible entity, in addition to the rebate, an amount
that--
(i) does not exceed $500; and
(ii) <> is commensurate
with the scale of the upgrades installed as part
of the qualified electrification project, as
determined by the Secretary.
(B) Treatment.--An amount received under
subparagraph (A) by an eligible entity described in that
subparagraph shall not be subject to the requirement
under paragraph (6).
(6) Requirement.--An eligible entity described in
subparagraph (C) of subsection (d)(1) shall discount the amount
of a rebate received for a qualified electrification project
from any amount charged by that eligible entity to the eligible
entity described in subparagraph (A) or (B) of that subsection
on behalf of which the qualified electrification project is
carried out.
(7) Exemption.--Activities carried out by a State energy
office using a grant provided under the program shall not be
subject to the expenditure prohibitions and limitations
described in section 420.18 of title 10, Code of Federal
Regulations.
[[Page 136 STAT. 2040]]
(8) Prohibition on combining rebates.--A rebate provided by
a State energy office or Indian Tribe under a high-efficiency
electric home rebate program may not be combined with any other
Federal grant or rebate, including a rebate provided under a
HOMES rebate program (as defined in section 50121(d)), for the
same qualified electrification project.
(9) Administrative costs.--A State energy office or Indian
Tribe that receives a grant under the program shall use not more
than 20 percent of the grant amount for planning,
administration, or technical assistance relating to a high-
efficiency electric home rebate program.
(d) Definitions.--In this section:
(1) Eligible entity.--The term ``eligible entity'' means--
(A) a low- or moderate-income household;
(B) an individual or entity that owns a multifamily
building not less than 50 percent of the residents of
which are low- or moderate-income households; and
(C) <> a governmental,
commercial, or nonprofit entity, as determined by the
Secretary, carrying out a qualified electrification
project on behalf of an entity described in subparagraph
(A) or (B).
(2) High-efficiency electric home rebate program.--The term
``high-efficiency electric home rebate program'' means a rebate
program carried out by a State energy office or Indian Tribe
pursuant to subsection (c) using a grant received under the
program.
(3) Indian tribe.--The term ``Indian Tribe'' has the meaning
given the term in section 4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 5304).
(4) Low- or moderate-income household.--The term ``low- or
moderate-income household'' means an individual or family the
total annual income of which is less than 150 percent of the
median income of the area in which the individual or family
resides, as reported by the Department of Housing and Urban
Development, including an individual or family that has
demonstrated eligibility for another Federal program with income
restrictions equal to or below 150 percent of area median
income.
(5) Program.--The term ``program'' means the program carried
out by the Secretary under subsection (a)(1).
(6) Qualified electrification project.--
(A) In general.--The term ``qualified
electrification project'' means a project that--
(i) includes the purchase and installation
of--
(I) an electric heat pump water
heater;
(II) an electric heat pump for space
heating and cooling;
(III) an electric stove, cooktop,
range, or oven;
(IV) an electric heat pump clothes
dryer;
(V) an electric load service center;
(VI) insulation;
(VII) air sealing and materials to
improve ventilation; or
(VIII) electric wiring;
(ii) with respect to any appliance described
in clause (i), the purchase of which is carried
out--
(I) as part of new construction;
[[Page 136 STAT. 2041]]
(II) to replace a nonelectric
appliance; or
(III) as a first-time purchase with
respect to that appliance; and
(iii) is carried out at, or relating to, a
single-family home or multifamily building, as
applicable and defined by the Secretary.
(B) Exclusions.--The term ``qualified
electrification project'' does not include any project
with respect to which the appliance, system, equipment,
infrastructure, component, or other item described in
subclauses (I) through (VIII) of subparagraph (A)(i) is
not certified under the Energy Star program established
by section 324A of the Energy Policy and Conservation
Act (42 U.S.C. 6294a), if applicable.
- Are available every year (from 2023 to 2032) for a max of $2,000 for HVAC heat pumps (and mini-splits) and $1,200 other items
- Are a 30% credit for each item. For example, if you install a $6,667 mini-split heat pump, you can get a $2,000 credit
- The $2,000 for heat pumps and $1,200 are separate credits. Thus, the maximum total yearly energy efficient home improvement credit amount may be up to $3,200
- Do not cover all items covered by rebates (wiring for example) but do cover some items for which there are no rebates (exterior doors for example)
- There is no income requirement
- The credits are "administered" by the IRS. They have some FAQs here and here.
- These credits are an extension of a prior law and are often referred to as 25C tax credits
- Some items have item specific caps that can then add up to the $1,200 per year total
- exterior doors (30% of costs up to $250 per door, up to a total of $500)
- exterior windows and skylights (30% of costs up to $600)
- insulation materials or systems and air sealing materials or systems (30% of costs)
- electrical panel (30% of costs, including labor, up to $600 for each item) if in conjunction with another item like a heat pump
Code: Select all
SEC. 13301. EXTENSION, INCREASE, AND MODIFICATIONS OF NONBUSINESS
ENERGY PROPERTY CREDIT.
(a) Extension of Credit.--Section 25C(g)(2) is amended by striking
``December 31, 2021'' and inserting ``December 31, 2032''.
[[Page 136 STAT. 1942]]
(b) <> Allowance of Credit.--Section 25C(a) is
amended to read as follows:
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter for
the taxable year an amount equal to 30 percent of the sum of--
``(1) the amount paid or incurred by the taxpayer for
qualified energy efficiency improvements installed during such
taxable year, and
``(2) the amount of the residential energy property
expenditures paid or incurred by the taxpayer during such
taxable year.''.
(c) Application of Annual Limitation in Lieu of Lifetime
Limitation.--Section 25C(b) is amended to read as follows:
``(b) Limitations.--
``(1) In general.--The credit allowed under this section
with respect to any taxpayer for any taxable year shall not
exceed $1,200.
``(2) Energy property.--The credit allowed under this
section by reason of subsection (a)(2) with respect to any
taxpayer for any taxable year shall not exceed, with respect to
any item of qualified energy property, $600.
``(3) Windows.--The credit allowed under this section by
reason of subsection (a)(1) with respect to any taxpayer for any
taxable year shall not exceed, in the aggregate with respect to
all exterior windows and skylights, $600.
``(4) Doors.--The credit allowed under this section by
reason of subsection (a)(1) with respect to any taxpayer for any
taxable year shall not exceed--
``(A) $250 in the case of any exterior door, and
``(B) $500 in the aggregate with respect to all
exterior doors.
``(5) Heat pump and heat pump water heaters; biomass stoves
and boilers.--Notwithstanding paragraphs (1) and (2), the credit
allowed under this section by reason of subsection (a)(2) with
respect to any taxpayer for any taxable year shall not, in the
aggregate, exceed $2,000 with respect to amounts paid or
incurred for property described in clauses (i) and (ii) of
subsection (d)(2)(A) and in subsection (d)(2)(B).''.
(d) Modifications Related to Qualified Energy Efficiency
Improvements.--
(1) Standards for energy efficient building envelope
components.--Section 25C(c)(2) is amended by striking ``meets--
'' and all that follows through the period at the end and
inserting the following: ``meets--
``(A) in the case of an exterior window or skylight,
Energy Star most efficient certification requirements,
``(B) in the case of an exterior door, applicable
Energy Star requirements, and
``(C) <> in the case of any
other component, the prescriptive criteria for such
component established by the most recent International
Energy Conservation Code standard in effect as of the
beginning of the calendar year which is 2 years prior to
the calendar year in which such component is placed in
service.''.
(2) Roofs not treated as building envelope components.--
Section 25C(c)(3) is amended by adding ``and'' at the
[[Page 136 STAT. 1943]]
end of subparagraph (B), by striking ``, and'' at the end of
subparagraph (C) and inserting a period, and by striking
subparagraph (D).
(3) Air sealing insulation added to definition of building
envelope component.--Section 25C(c)(3)(A) <>
is amended by inserting ``, including air sealing material or
system,'' after ``material or system''.
(e) Modification of Residential Energy Property Expenditures.--
Section 25C(d) is amended to read as follows:
``(d) <> Residential Energy Property
Expenditures.--For purposes of this section--
``(1) In general.--The term `residential energy property
expenditures' means expenditures made by the taxpayer for
qualified energy property which is--
``(A) installed on or in connection with a dwelling
unit located in the United States and used as a
residence by the taxpayer, and
``(B) originally placed in service by the taxpayer.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property.
``(2) <> Qualified energy
property.--The term `qualified energy property' means any of the
following:
``(A) Any of the following which meet or exceed the
highest efficiency tier (not including any advanced
tier) established by the Consortium for Energy
Efficiency which is in effect as of the beginning of the
calendar year in which the property is placed in
service:
``(i) An electric or natural gas heat pump
water heater.
``(ii) An electric or natural gas heat pump.
``(iii) A central air conditioner.
``(iv) A natural gas, propane, or oil water
heater.
``(v) A natural gas, propane, or oil furnace
or hot water boiler.
``(B) A biomass stove or boiler which--
``(i) uses the burning of biomass fuel to heat
a dwelling unit located in the United States and
used as a residence by the taxpayer, or to heat
water for use in such a dwelling unit, and
``(ii) has a thermal efficiency rating of at
least 75 percent (measured by the higher heating
value of the fuel).
``(C) Any oil furnace or hot water boiler which--
``(i) is placed in service after December 31,
2022, and before January 1, 2027, and--
``(I) meets or exceeds 2021 Energy
Star efficiency criteria, and
``(II) is rated by the manufacturer
for use with fuel blends at least 20
percent of the volume of which consists
of an eligible fuel, or
``(ii) is placed in service after December 31,
2026, and--
``(I) achieves an annual fuel
utilization efficiency rate of not less
than 90, and
[[Page 136 STAT. 1944]]
``(II) is rated by the manufacturer
for use with fuel blends at least 50
percent of the volume of which consists
of an eligible fuel.
``(D) Any improvement to, or replacement of, a
panelboard, sub-panelboard, branch circuits, or feeders
which--
``(i) is installed in a manner consistent with
the National Electric Code,
``(ii) has a load capacity of not less than
200 amps,
``(iii) is installed in conjunction with--
``(I) any qualified energy
efficiency improvements, or
``(II) any qualified energy property
described in subparagraphs (A) through
(C) for which a credit is allowed under
this section for expenditures with
respect to such property, and
``(iv) enables the installation and use of any
property described in subclause (I) or (II) of
clause (iii).
``(3) Eligible fuel.--For purposes of paragraph (2), the
term `eligible fuel' means--
``(A) biodiesel and renewable diesel (within the
meaning of section 40A), and
``(B) second generation biofuel (within the meaning
of section 40).''.
(f) Home Energy Audits.--
(1) In general.--Section 25C(a), as amended by subsection
(b), is amended <> by striking ``and'' at
the end of paragraph (1), by striking the period at the end of
paragraph (2) and inserting ``, and'', and by adding at the end
the following new paragraph:
``(3) the amount paid or incurred by the taxpayer during the
taxable year for home energy audits.''.
(2) Limitation.--Section 25C(b), as amended by subsection
(c), is amended adding at the end the following new paragraph:
``(6) Home energy audits.--
``(A) Dollar limitation.--The amount of the credit
allowed under this section by reason of subsection
(a)(3) shall not exceed $150.
``(B) Substantiation requirement.--No credit shall
be allowed under this section by reason of subsection
(a)(3) unless the taxpayer includes with the taxpayer's
return of tax such information or documentation as the
Secretary may require.''.
(3) Home energy audits.--
(A) In general.--Section 25C is amended by
redesignating subsections (e), (f), and (g), as
subsections (f), (g), and (h), respectively, and by
inserting after subsection (d) the following new
subsection:
``(e) <> Home Energy Audits.--For purposes of
this section, the term `home energy audit' means an inspection and
written report with respect to a dwelling unit located in the United
States and owned or used by the taxpayer as the taxpayer's principal
residence (within the meaning of section 121) which--
``(1) <> identifies the most
significant and cost-effective energy efficiency improvements
with respect to such dwelling unit, including an estimate of the
energy and cost savings with respect to each such improvement,
and
[[Page 136 STAT. 1945]]
``(2) <>
is conducted and prepared by a home energy auditor that meets
the certification or other requirements specified by the
Secretary in regulations or other guidance (as prescribed by the
Secretary not later than 365 days after the date of the
enactment of this subsection).''.
(B) <> Conforming amendment.--
Section 1016(a)(33) is amended by striking ``section
25C(f)'' and inserting ``section 25C(g)''.
(4) Lack of substantiation treated as mathematical or
clerical error.--Section 6213(g)(2) is amended--
(A) in subparagraph (P), by striking ``and'' at the
end,
(B) in subparagraph (Q), by striking the period at
the end and inserting ``, and'', and
(C) by inserting after subparagraph (Q) the
following:
``(R) an omission of information or documentation
required under section 25C(b)(6)(B) (relating to home
energy audits) to be included on a return.''.
(g) Identification Number Requirement.--
(1) In general.--Section 25C, as amended by this section, is
amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) <> Product Identification Number
Requirement.--
``(1) <> In general.--No credit
shall be allowed under subsection (a) with respect to any item
of specified property placed in service after December 31, 2024,
unless--
``(A) such item is produced by a qualified
manufacturer, and
``(B) the taxpayer includes the qualified product
identification number of such item on the return of tax
for the taxable year.
``(2) Qualified product identification number.--For purposes
of this section, the term `qualified product identification
number' means, with respect to any item of specified property,
the product identification number assigned to such item by the
qualified manufacturer pursuant to the methodology referred to
in paragraph (3).
``(3) Qualified manufacturer.--For purposes of this section,
the term `qualified manufacturer' means any manufacturer of
specified property which enters into an agreement with the
Secretary which provides that such manufacturer will--
``(A) assign a product identification number to each
item of specified property produced by such manufacturer
utilizing a methodology that will ensure that such
number (including any alphanumeric) is unique to each
such item (by utilizing numbers or letters which are
unique to such manufacturer or by such other method as
the Secretary may provide),
``(B) label such item with such number in such
manner as the Secretary may provide, and
``(C) <> make periodic written
reports to the Secretary (at such times and in such
manner as the Secretary may provide) of the product
identification numbers so assigned and including such
information as the Secretary may require with respect to
the item of specified property to which such number was
so assigned.
[[Page 136 STAT. 1946]]
``(4) Specified property.--For purposes of this subsection,
the term `specified property' means any qualified energy
property and any property described in subparagraph (B) or (C)
of subsection (c)(3).''.
(2) Omission of correct product identification number
treated as mathematical or clerical error.--Section 6213(g)(2),
as amended by the preceding provisions of this Act,
is <> amended--
(A) in subparagraph (Q), by striking ``and'' at the
end,
(B) in subparagraph (R), by striking the period at
the end and inserting ``, and'', and
(C) by inserting after subparagraph (R) the
following:
``(S) an omission of a correct product
identification number required under section 25C(h)
(relating to credit for nonbusiness energy property) to
be included on a return.''.
(h) Energy Efficient Home Improvement Credit.--
(1) In general.--The heading for section 25C is amended by
striking ``nonbusiness energy property'' and inserting ``energy
efficient home improvement credit''.
(2) Clerical amendment.--The table of sections for subpart A
of part IV of subchapter A of chapter 1 <> is amended by striking the item relating to section 25C
and inserting after the item relating to section 25B the
following item:
``Sec. 25C. Energy efficient home improvement credit.''.
(i) <> Effective Dates.--
(1) In general.--Except as otherwise provided by this
subsection, the amendments made by this section shall apply to
property placed in service after December 31, 2022.
(2) Extension of credit.--The amendments made by subsection
(a) shall apply to property placed in service after December 31,
2021.
(3) Identification number requirement.--The amendments made
by subsection (g) shall apply to property placed in service
after December 31, 2024.
Resources / References
- IRS main help page on the law - here
- IRS FAQ on energy efficient home improvements and residential clean energy property credits here
- Full Law Text - here
- Database where you can lookup fed/state rebates/credits in your area - here
- Resouces by a company that has a energy waste focus - here
- Resources by an organization looking to move people to electric power - here
- Calculator for rebate income eligibility in your area - here
Thanks